Market Dynamics
Introduction
AC electric motors are defined as machines that convert alternating current (AC) electrical energy into mechanical energy, and they can be found throughout the oil & gas industry as the driver of pumps, compressors, fans, and drilling equipment, amongst many other things. The main advantage of AC electric motors is their solid design and efficiency, while also providing control of torque and speed in harsh and hazardous environments, while maintaining reliability. There are two primary types of AC motors used in the oil & gas industry, namely induction and synchronous motors, among other various designs, for motor applications in upstream, midstream, and downstream applications.
The rise in popularity of AC electric motors in the oil & gas industry followed from the various major advantages they provide versus internal combustion. AC electric motors provide a lower total cost of operation and are also expected to provide higher uptime and reliability versus their internal combustion peers. As the industry shifts to more automated and energy-efficient processes and technologies, electric motors are at or near the forefront of the industry's evolution. Additionally, in the current environment where there is an increased emphasis on lessening carbon emissions and compliance with safety, the use of AC electric motors should dominate mission-critical oilfield processes.
Recent Market JVs and Acquisitions:
A considerable number of strategic alliances, including M&As, JVs, etc., have been performed over the past few years:
- In 2022, ABB acquired Siemens’ low-voltage NEMA motor business, which strengthened ABB’s position in North America and enhanced its portfolio for oil & gas applications.
Segment Analysis
|
Segmentations
|
List of Sub-Segments
|
Segments with High-Growth Opportunity
|
|
Motor-Type Analysis
|
Induction Motor and Synchronous Motor
|
The Induction Motor is expected to remain dominant in the coming years.
|
|
Voltage Range-Type Analysis
|
Low Voltage Motors, Medium Voltage Motors, and High Voltage Motors
|
Low-Voltage Motors hold the largest share of the market throughout the forecast period.
|
|
Application-Type Analysis
|
Pumps, Compressors, Fans, and Other Application Types
|
Pumps are expected to be the most used application in the market
|
|
End Use-Type Analysis
|
Upstream, Midstream, and Downstream
|
Upstream is anticipated to continue its dominance during the forecasted period.
|
|
Region Analysis
|
North America, Europe, Asia-Pacific, and The Rest of the World
|
The Asia-Pacific is expected to maintain its reign over the forecast period.
|
By Motor Type
“Induction Motor is expected to remain in the market during the forecast period.”
Induction motors are expected to dominate the motor type category based on their robustness, low cost, and availability across a wide range of power ratings. From an operational standpoint, the oil & gas industry uses induction motors because their construction is less complex, they can operate in hazardous conditions, and they are optimized for extreme scenarios (highly repetitive operations under continuous duty). Induction motors have reduced maintenance implications, are easier to install, and can be relied upon to run continuously; therefore, they are preferred by operators looking for minimum maintenance and long-term solutions.
Technical details have improved the efficiency and control of induction motors thanks to substantial developments in Variable Frequency Drives (VFDs). This has allowed for greater integration into more complex and automated oilfield processes. Induction motors are particularly suited to pump, compressor, and fan applications in both upstream and downstream applications. Overall, induction motors will dominate because it makes sense. Synchronous motors provide benefits associated with minimized speed variation, but the cost, complexity, and low number of applications will prevent their broad-based adoption over induction motor technologies.
By Voltage Range Type
“Low Voltage Motors are expected to remain the dominant during the forecast period.”
Medium voltage AC motors are believed to dominate because they provide the right level of power capacity for the $$$ and are ideal for pipeline transportation, offshore drilling, large pumping stations, etc., where power is tens of kilowatts to a couple of megawatts. They can deliver excellent torque and efficiency compared to other motor types and are ideally suited for oil & gas applications with even the most demanding duty cycles, where cash and complexity of high voltage systems are a consideration.
Medium voltage systems can also be modular and are easier to incorporate into automation and control-type systems, allowing for smarter digital operation and diagnostics in the oilfield. Low voltage motors are adequate for drilling or production machinery with much smaller size or auxiliary function; high voltage systems can be deployed for supermassive installations, but medium voltage systems are the most versatile for large power needs onshore and offshore - hence the likelihood of their dominance in this area.
By Application Type
“Pumps are expected to remain the dominant during the forecast period.”
We anticipate pumps will account for a majority of the application segment due to their significance throughout all stages of oil and natural gas activities, from extraction to refining. For upstream activities like drilling, electric motors drive pumps to lift crude oil and inject water or gas for enhanced oil recovery. In midstream and downstream activities, pumps are instrumental for transporting crude oil, refined products, and chemicals through pipelines and processing facilities, putting them at the forefront of importance.
A growing demand for energy-efficient and explosion-proof motors suitable for hazardous environments has also aided in the greater acceptance of electric motors in pump applications. In addition, regulatory pressures regarding operational efficiency and emissions are also leading operators to switch to electric motor-driven pumps, emphasizing their dominant role in the market.
By End Use Type
“Upstream use of motors is expected to dominate the market during the forecast period.”
Out of the three oil & gas industry segments, the Upstream segment is expected to hold the majority of sales volume for the AC electric motor market. Upstream activities such as drilling, extraction, and artificial lift are all highly dependent on electric motors for pumping, compression, and surface equipment. There are many installations with specific requirements that include being high-performance, explosion-proof, and having high reliability in sub-sea and arctic conditions. With the ongoing issues of energy supply and growing demand, energy-rich nations are resuming or ramping up exploration, particularly in deepwater and shale, which has spurred the need for enhanced motor systems in the upstream segment.
Furthermore, electric motors in upstream applications are an enabler towards automation and energy efficiency. As energy companies are working towards decarbonization, electric motors are being accepted as a substitute technology and are preferred over hydraulic or diesel technology. The midstream and downstream segments of oil and gas utilize electric motors, but typically the use is much more predictable and centralized, while the upstream applications have larger numbers, and they also have far more extensive applications. They drive more value and volume for electric motor suppliers.
Regional Analysis
“The Asia-Pacific is expected to remain the largest market for AC Electric Motor Sales in Oil & Gas during the forecast period.”
The AC electric motor sales in the oil & gas market are expected to be led by Asia-Pacific for the regional segment, as countries like China and India have extensive refining and pipeline infrastructure. These countries are investing in crises of values in refurbishing oil & gas processing plants, and expanding their energy capacity to address an increased demand from continually expanding industrial and domestic development. It is also clear supply chain of cost-effective manufacturing bases, and suppliers of components, and the government perspectives on pledging the initiative drivers that compel industries with energy efficiency, and greenhouse gas emission reductions.
There has been a consistent increase in the opportunities to explore and produce offshore in Southeast Asia, and in the South China Sea, in conjunction with development projects in economic alliances across the ocean in Australia and Indonesia. It is clear that North America and the Middle East remain key players with established oil & gas infrastructure; however, the rapid pace of development and trends in energy consumption and advancing capital expenditure in the Asia-Pacific indicate it will lead the regional market forward.
